Corporate charitable giving decisions have a direct and significant impact on both brand value and market value. When companies rely on organizations engaged in highly controversial activities for such guidance, they risk alienating customers, employees, and shareholders, and expose themselves to significant reputational, legal, and competitive risks. These risks can materially affect Starbucks’ brand value, a key driver of market value.

The Southern Poverty Law Center (SPLC) is a prime example. While historically known for legal victories against hate groups, the SPLC now maintains a list of “hate groups” that inaccurately equates mainstream conservatives and Christians, including parental rights organizations, mainstream Catholics,(1) Alliance Defending Freedom, Dr. Ben Carson, and Franklin Graham with extremists.

The SPLC’s use of vague, overbroad, and persistently undefined terms like “hate” to vet nonprofits is of deep concern to shareholders, as rhetoric around “hate” generates disturbing real-world consequences, including the 2012 shooting at the Family Research Council and, more recently, the assassination of Charlie Kirk, whose organization, Turning Point USA, the SPLC had recently added to their list. In both cases, rhetoric surrounding vague terms such as “hate” (and in the case of the Family Research Council, the SPLC’s “hate map” was explicitly mentioned(2)) was cited as a factor in these heinous acts of violence. Despite condemning these attacks, the SPLC has refused to remove the “hate group” label from the targeted organizations.

The SPLC’s recent lambasting of Turning Point USA(3) and Focus on the Family(4) as “hate groups” has intensified criticism, including from federal lawmakers,(5) that it targets conservative and Christian groups for their beliefs.

Despite this, Starbucks uses the SPLC to vet charities for its Partner Matching Gifts program.(6) This practice has raised concerns among shareholders about the potential reputational risks associated with supporting an organization that has been criticized for its controversial practices. Continued support for the SPLC may be perceived as endorsement of its controversial practices, potentially harming Starbucks’ brand value and, by extension, its market value. Starbucks is one of the most valuable brands in the world, with its $38 billion brand value comprising a significant portion of its $93 billion market cap. The reputational brand risk associated with supporting controversial organizations like the SPLC is a significant concern for shareholders and can have long-term implications for the company’s standing in the marketplace.

Many leading companies have refocused their policies to rely on internal vetting systems to better reflect responsibility to both political neutrality and fiduciary duty and to mitigate the reputational risk of politicized policies. It is time for Starbucks to do the same.